Somewhat to my delighted amazement, a limit BUY order I had sitting on the books for 13,000 (more) shares of Claude Resources (CGR) at $0.40 was hit this morning. A short while back I was hoping to get these shares filled at $0.38 but when it appeared I was unlikely to see that price again I moved my bid up a couple pennies, and today I got real lucky.
My TSI Trading record has been updated.
Claude Resource's last peak high was $2.91 on March 2, 2011. At that time gold was just under $1450 and about to make a 5-6 month trek to reach $1923. Following CGR's peak, price meandered in a range of $2.30 and $1.70. Once $1.70 gave way CGR slowly slid for another 5 months and found support at around the $0.55 area. In February, two short months ago, this price support failed and CGR reached as low as $0.38 numerous days in early March. It appears to me we are now getting something of a final retest of this incredibly low price.
I mention the price history of CGR above to make a couple of simple points. First, the share price of some mining stocks is often best understood as irrational. With this outlook one can focus more on sentiment which, as it sways for and against the mining group and the underlying metals (gold and silver) will take mining stocks from one crazy extreme low to one crazy extreme high, and so on.
And second, as I am unaware of any terribly significant development from the company since March of 2011 (earnings, projected earnings, debt, management changes, exploration achievements, dilution, etc.) when the stock traded up to $2.91, the explanation for the differences in share price then and now is a matter of investor perception. And the perception is that miners and gold are going to fall off the face of the planet and apparently soon.
Oh well, twist my arm to take some more shares. They are mine now.
|Click on the chart to ENLARGE|
Hummm...... let's see. If gold returns to $1900 and this extreme and irrational negative investor perception begins to swing in the opposite direction.... well, I suppose $2.00, all things considered, would be a decent selling price for CGR.
Patience. And I have lots of that!